The Internet Archives employee Silken Wuang flips pages on a San Francisco library book that she is digitizing.

Photo: Lance Iversen, The Chronicle

The Internet Archives employee Silken Wuang flips pages on a San...

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An Internet Archives employee reviews every page for accuracy after finishing coping a book Tuesday.

Photo: Lance Iversen, The Chronicle

An Internet Archives employee reviews every page for accuracy after...

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Internet Archives employees copy pages from books Tuesday.

Photo: Lance Iversen, The Chronicle

Internet Archives employees copy pages from books Tuesday.

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San Francisco nonprofit Internet Archives CEO Robert Miller has hired dozens of new employees using using stimulus funds that have been channeled through the city of San Francisco. Tuesday July 13, 2010.

Photo: Lance Iversen, The Chronicle

San Francisco nonprofit Internet Archives CEO Robert Miller has...

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The Internet Archives employee Juana Thomas adjusts one of two digital cameras used to copy pages from a book Tuesday.

Several dozen workers at a book-scanning factory in San Francisco are among 3,500 city residents who are earning paychecks today thanks to a federal wage subsidy that will expire Sept. 30 unless Congress puts an additional $2.5 billion into the program.

The workers are employed by the Internet Archive, a nonprofit group that is digitizing off-copyright and out-of-print books to help build the free OpenLibrary.org.

But all the wages for these workers, who start at $11 an hour, are being paid through a federal stimulus program created in part to help put unemployed parents back to work. Employers pay all taxes and any benefits that workers accrue. Their supervisory and overhead costs are assumed to meet the required 20 percent federal match.

Trent Rhorer, executive director of San Francisco's Human Services Agency, which has administered the program, says it has brought about $55 million in new wages into the city.

Democrats in Congress want to extend the subsidy for another year. Republicans do not. Rhorer said the 3,500 workers are employed by hundreds of local companies and agencies that may have to decide soon whether to keep workers at their jobs after the subsidy expires.

"We knew this was going to be a time-limited program," he said.

Over the past 18 months San Francisco has been among the nation's most creative users of this salary subsidy, working with the local Chamber of Commerce to place workers with private companies as well as nonprofit groups and governmental agencies.

Chamber President Steve Falk said the group supports the extension despite some misgivings among members about government spending.

"There is a true benefit coming from the dollars spent," Falk said. "People are actually working. Companies are benefiting."

'Good, solid positions'

The Internet Archive has used the federal subsidy to hire more than 120 San Franciscans, according to Robert Miller, director of books for the organization. He said Archive, with help from the Craigslist Foundation, will keep its current staff on the payroll through December even if Congress lets the program lapse.

But he argued that the subsidy should be extended to give the labor market more time to recover.

"We've been able to create good, solid positions for people who have been out of work," Miller said.

At an Archive office in San Francisco, Juana Thomas sat at a workstation that included two cameras focused on glass plates. The glass flattened the open books while she snapped pictures of each page.

Alternative to prison

"This is my first job in like 15 to 20 years," said Thomas, who came to Archive through a city program designed to help former prison inmates adjust to civilian life. "This is a great opportunity for me," she added. "I don't ever want to go back to prison or the life I had."

Archive supervisor Kieleil-DeLeon Frazier is a single father who had been a property manager for several years before he was laid off in June 2009. Even if Congress lets the subsidy lapse and his job ends in December, the income and experience have been a big help in hard times.

"This is the largest staff that I have ever managed," said Frazier, who oversees about 20 people who scan books, double check the images and return the originals to the donor libraries.

LaDonna Pavetti, an analyst with the nonpartisan Center for Budget and Policy Priorities in Washington, said San Francisco has been among the most innovative users of the job subsidy funding. The program was part of the American Recovery and Reinvestment Act, which allocated $5 billion that states could direct toward three missions: subsidizing jobs, reimbursing states for the increased costs due to rising welfare caseloads and short-term emergency aid to the poor.

Pavetti said about $4 billion has been spent thus far and the rest of the funds will probably be spent by Sept. 30. About $1 billion of the spending to date has been directed toward creating about 243,730 jobs, with the rest of the funds going toward the other two purposes.

Democrats in Congress want to allocate an additional $2.5 billion to extend the program until Sept. 30, 2011. Senate Republicans focused on curbing the deficit have used filibuster threats to block House-passed bills containing this extension.

Pavetti said Democrats will probably again try again to push this program through the Senate, but the outcome is unpredictable.